Smith & Wesson Brands, Inc. Reports Fourth Quarter and Full Fiscal 2025 Financial Results

- Q4 Net Sales of $140.8 Million - Q4 Gross Margin of 28.8%; Non-GAAP Gross Margin of 29.2% - Q4 EPS of $0.19/Share Maryville, Tennessee--(Newsfile Corp. - June 18, 2025) - Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the fourth quarter and full fiscal year 2025, ended April 30, 2025. Fourth Quarter Fiscal 2025 Financial Highlights Net sales were $140.8 million, a decrease of $18.4 million, or 11.6%, from the comparable quarter last year.Gross margin was 28.8% compared with 35.5% in the comparable quarter last year.GAAP net income was $8.6 million, or $0.19 per diluted share, compared with $27.3 million, or $0.59 per diluted share, for the comparable quarter last year.Non-GAAP net income was $9.0 million, or $0.20 per diluted share, compared with $22.1 million, or $0.48 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income exclude costs related to the relocation. For a detailed reconciliation, see the schedules that follow in this release.Non-GAAP Adjusted EBITDAS was $24.1 million, or 17.2% of net sales, compared with $37.6 million, or 23.6% of net sales, for the comparable quarter last year. Full Year Fiscal 2025 Financial Highlights Net sales were $474.7 million, a decrease of $61.2 million, or 11.4%, from the prior fiscal year.Gross margin was 26.8% compared with 29.5% in the prior fiscal year.GAAP net income was $13.4 million, or $0.30 per diluted share, compared with $41.4 million, or $0.89 per diluted share, for the prior fiscal year.Non-GAAP net income was $14.6 million, or $0.33 per diluted share, compared with $44.4 million, or $0.96 per diluted share, for the prior fiscal year. GAAP to non-GAAP adjustments for income include costs related to the relocation, a gain on sale of certain real estate, and other costs. For a detailed reconciliation, see the schedules that follow in this release.Non-GAAP Adjusted EBITDAS was $67.3 million, or 14.3% of net sales, compared with $96.6 million, or 18.0% of net sales, for the prior fiscal year. Mark Smith, President and Chief Executive Officer, commented, "Fourth quarter proved more difficult than we anticipated largely due to macro-economic and industry trends. While the combination of lower sales and production volumes, along with mix factors, pressured margins, we were able to partially offset the bottom-line impact through disciplined cost management and by leveraging our flexible manufacturing model. Looking at the overall firearms market, we continue to see consumers generally being cautious due to macro-economic factors pressuring discretionary spending. While new products and lower price point offerings are still performing well, overall conditions suggest headwinds will likely persist in the near term. Despite these challenges, we remain well positioned to succeed in this environment." Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "We believe that firearm market conditions have been negatively impacted by persistent inflation, high interest rates, and uncertainty caused by tariff concerns. That being said, the success of our new products has enabled us to maintain a leadership position in the categories of the firearm market in which we compete. We currently expect demand for firearms in fiscal 2026 to be similar to what we saw in fiscal 2025, remaining subject to economic headwinds such as inflation and the impact of tariff-related cost increases. Consistent with our capital allocation strategy, our board of directors has authorized a $0.13 per share quarterly dividend, which will be paid to stockholders of record on July 7, 2025 with payment to be made on July 21, 2025." Conference Call and Webcast The company will host a conference call and webcast on June 18, 2025 to discuss its fourth quarter and full fiscal 2025 financial and operational results. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties in North America are invited to participate by dialing 1-877-704-4453. Interested parties from outside North America are invited to participate by dialing 1-201-389-0920. Participants should dial in at least 10 minutes prior to the start of the call. A live and archived webcast of the event will be available on the company's website at www.smith-wesson.com under the Investor Relations section. Reconciliation of U.S. GAAP to Non-GAAP Financial Measures In this press release, certain non-GAAP financial measures, including "non-GAAP net income," "Adjusted EBITDAS," and "free cash flow" are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for us and the reader to review, as applicable, both (1) GAAP measures that include (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) spin related stock-based compensation, (vi) an accrued legal settlement, (vii) a gain on sale of certain real estate, (viii) a gain on sale of intangible assets, (ix) Relocation expense, and (x) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis. About Smith & Wesson Brands, Inc. Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson® and Gemtech® brands. The company also provides forging and machining services to third parties. For more information call (800) 331-0852 or visit www.smith-wesson.com. Safe Harbor Statement Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, among others, that (i) with respect to the overall firearms market, we continue to see consumers generally being cautious due to macro-economic factors pressuring discretionary spending; (ii) overall conditions suggest headwinds will likely persist in the near term; (iii) we remain well positioned to succeed in this environment; and (iv) we currently expect demand for firearms in fiscal 2026 to be similar to what we saw in fiscal 2025, remaining subject to economic headwinds such as inflation and the impact of tariff-related cost increases. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the impact of tariffs; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to effectively manage and execute the Relocation; our ability to introduce new products; the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2025. SMITH & WESSON BRANDS, INC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) As of: April 30, 2025 April 30, 2024 (In thousands, except par value and share data)ASSETSCurrent assets: Cash and cash equivalents$ 25,231 $ 60,839Accounts receivable, net of allowances for credit losses of $5 on April 30, 2025 and $0 on April 30, 2024 55,868 59,071 Inventories 189,840 160,500Prepaid expenses and other current assets 6,260 4,973Income tax receivable 66 1,948Total current assets 277,265 287,331Property, plant, and equipment, net of accumulated depreciation and amortization of $368,811 on April 30, 2025 and $352,615 on April 30, 2024 242,648 252,633 Intangibles, net 2,409 2,598Goodwill 19,024 19,024Deferred income taxes 10,260 7,228Other assets 8,006 8,614Total assets$ 559,612 $577,428LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities: Accounts payable$ 26,887 $ 41,831Accrued expenses and deferred revenue 24,678 24,489Accrued payroll and incentives 9,060 17,147Accrued profit sharing 4,636 9,098Accrued warranty 1,379 1,813Total current liabilities 66,640 94,378Notes and loans payable 79,096 39,880Finance lease payable, net of current portion 33,703 35,404Other non-current liabilities 7,719 7,852Total liabilities 187,158 177,514Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued or outstanding — — Common stock, $0.001 par value, 100,000,000 shares authorized, 75,789,455 issued and 44,111,461 shares outstanding on April 30, 2025 and 75,395,490 shares issued and 45,561,569 shares outstanding on April 30, 2024 76 75 Additional paid-in capital 298,075 289,994Retained earnings 532,615 542,414Accumulated other comprehensive income — 73Treasury stock, at cost (31,677,994 shares on April 30, 2025 and 29,833,921 shares on April 30, 2024) (458,312) (432,642) Total stockholders' equity 372,454 399,914Total liabilities and stockholders' equity$ 559,612 $ 577,428 SMITH & WESSON BRANDS, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the Three Months Ended April 30, For the Year Ended April 30, 2025 2024 2025 2024 (In thousands, except per share data)Net sales$ 140,762 $ 159,148 $ 474,661 $ 535,833Cost of sales 100,217 102,646 347,478 377,740Gross profit 40,545 56,502 127,183 158,093Operating expenses: Research and development 1,962 1,774 9,567 7,258Selling, marketing, and distribution 11,473 9,473 41,314 40,611General and administrative 13,974 18,258 54,933 63,134Gain on sale/disposition of assets, net 6 (10) (2,515) (11)Total operating expenses 27,415 29,495 103,299 110,992Operating income 13,130 27,007 23,884 47,101Other (expense)/income, net: Other (expense)/income, net (6) 6,496 (17) 6,672Interest expense, net (748) (607) (4,622) (2,055)Total other (expense)/income, net (754) 5,889 (4,639) 4,617Income before income taxes 12,376 32,896 19,245 51,718Income tax expense 3,742 5,561 5,820 10,356Net income $ 8,634 $ 27,335 $ 13,425 $ 41,362Net income per share: Basic - net income$ 0.20 $ 0.60 $ 0.30 $ 0.90Diluted - net income$ 0.19 $0.59 $ 0.30 $ 0.89Weighted average number of common shares outstanding: Basic 44,040 45,544 44,484 45,813Diluted 44,508 46,043 44,932 46,248 SMITH & WESSON BRANDS, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Year Ended April 30, 2025 2024 (In thousands)Cash flows from operating activities: Net income $ 13,425 $ 41,362Adjustments to reconcile net income to net cash (used in)/provided by operating activities: Depreciation and amortization 31,845 32,558Gain on sale/disposition of assets (2,515) (5,595)Recoveries on notes and accounts receivable - (23)Deferred income taxes (3,032) 856Stock-based compensation expense 7,609 5,683Non-cash sublease income (1,724) —Other, net (73) —Changes in operating assets and liabilities: Accounts receivable 3,203 (3,896)Inventories (29,340) 16,618Prepaid expenses and other current assets (1,287) (57)Income taxes 1,882 (2,601)Accounts payable (14,771) 18,341Accrued payroll and incentives (8,087) (1,418)Accrued profit sharing (4,462) 895Accrued expenses and deferred revenue (268) 3,996Accrued warranty (434) 142Other assets 938 (267)Other non-current liabilities (132) 145Net cash (used in)/provided by operating activities (7,223) 106,739Cash flows from investing activities: Payments to acquire patents and software (187) (186)Proceeds from sale of property and equipment 2,619 2,955Proceeds from sale of intangible assets — 6,500Payments to acquire property and equipment (21,605) (90,759)Net cash used in investing activities (19,173) (81,490)Cash flows from financing activities: Proceeds from loans and notes payable 75,000 50,000Cash paid for debt issuance costs (941) —Payments on finance lease obligation (179) (1,378)Payments on notes and loans payable (35,000) (35,000)Payments to acquire treasury stock (25,468) (10,213)Dividend distribution (23,096) (22,020)Proceeds to acquire common stock from employee stock purchase plan 1,598 1,484Payment of employee withholding tax related to restricted stock units (1,126) (839)Net cash (used in)/provided by financing activities (9,212) (17,966)Net (decrease)/increase in cash and cash equivalents (35,608) 7,283Cash and cash equivalents, beginning of period 60,839 53,556Cash and cash equivalents, end of period $ 25,231 $ 60,839Supplemental disclosure of cash flow information Cash paid for: Interest, net of amounts capitalized $ 5,193 $ 4,745Income taxes $ 7,288 $ 12,662 SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (Dollars in thousands, except per share data) (Unaudited) For the Three Months Ended For the Twelve Months Ended April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024 $ % of Sales $ % of Sales $ % of Sales $ % of SalesGAAP net sales$140,762 $159,148 $474,661 $535,833 Relocation — — (4,340) — Non-GAAP net sales$140,762 $159,148 $470,321 $535,833 GAAP gross profit$40,545 28.8% $56,502 35.5% $127,183 26.8% $158,093 29.5%Relocation expenses 516 162 3,346 2,115 Settlement — — 70 3,200 Non-GAAP gross profit$41,061 29.2% $56,664 35.6% $130,599 27.8% $163,408 30.5% GAAP operating expenses$27,415 19.5% $29,495 18.5% $103,299 21.8% $110,992 20.7%Gain on sale of asset — — 2,257 — Spin related stock-based compensation — (3) — (13) Relocation expenses (26) 155 (612) (4,938) Non-GAAP operating expenses$27,389 19.5% $29,647 18.6% $104,944 22.3% $106,041 19.8% GAAP operating income$13,130 9.3% $27,007 17.0% $23,884 5.0% $47,101 8.8%Gain on sale of asset — — (2,257) — Settlement — — 70 3,200 Spin related stock-based compensation — 3 — 13 Relocation expenses 542 7 3,958 7,053 Non-GAAP operating income$13,672 9.7% $27,017 17.0% $25,655 5.5% $57,367 10.7% GAAP net income$8,634 6.1% $27,335 17.2% $13,425 2.8% $41,362 7.7%Gain on sale of asset — — (2,257) — Settlement — — 70 3,200 Sale of intangible assets — (6,500) — (6,500) Spin related stock-based compensation — 3 — 13 Relocation expenses 542 7 3,958 7,053 Tax effect of non-GAAP adjustments (169) 1,285 (551) (746) Non-GAAP net income$9,007 6.4% $22,130 13.9% $14,645 3.1% $44,382 8.3% GAAP net income per share - diluted$0.19 $0.59 $0.30 $0.89 Gain on sale of asset — — (0.05) — Settlement — — — 0.07 Sale of intangible assets — (0.14) — (0.14) Spin related stock-based compensation — — — — Relocation expenses 0.01 — 0.09 0.15 Tax effect of non-GAAP adjustments — 0.03 (0.01) (0.02) Non-GAAP net income per share - diluted$0.20 $0.48 $0.33 $0.96(a) (a) Non-GAAP net income per share does not foot due to rounding. SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDAS (In thousands) (Unaudited) For the Three Months Ended For the Twelve Months Ended April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024 GAAP net income $8,634 $ 27,335 $13,425 $ 41,362Interest expense 1,408 1,434 7,289 4,838Income tax expense 3,742 5,561 5,820 10,356Depreciation and amortization 7,934 8,324 31,688 32,469Stock-based compensation expense 1,885 1,419 7,609 5,683Settlement — — 70 3,200Gain on sale of asset — — (2,257) —Gain on sale of intangible assets — (6,500) — (6,500)Relocation expense 538 7 3,681 5,193Non-GAAP Adjusted EBITDAS $ 24,141 $ 37,580 $67,325 $96,601 Non-GAAP Adjusted EBITDAS Margin 17.2% 23.6% 14.3% 18.0% SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES RECONCILIATION OF NET CASH (USED IN) / PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands) (Unaudited) For the Three Months Ended For the Twelve Months Ended April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024 Net cash provided by/(used in) operating activities $ 40,828 $43,616 $ (7,223) $106,739 Payments to acquire property and equipment (7,291) (5,571) (21,605) (90,759)Free cash flow $33,537 $38,045 $(28,828) $15,980 Immaterial Correction of an Error During the fourth quarter of fiscal 2025, we identified an immaterial error related to our accrual for certain legal expenses, resulting in an overstatement of general and administrative expenses in 2024 and 2025. In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated the errors and determined that the related impact was not material to results of operations, financial position, or cash flows for any historical annual or interim period. Prior year amounts have been adjusted to reflect the immaterial correction, which (i) overstated accrued expenses and deferred revenue and general and administrative expenses by $2.3 million and (ii) understated income tax expense and overstated income tax receivable each by $548,000, in each case as of April 30, 2024 and for the year then ended. To view the source version of this press release, please visit https://www.newsfilecorp.com/release/255931 Print Page Subscribe to Updates RSS Feeds IR Disclaimer